Editor: Yuki | ID: YukiYuki1108

The United States is about to implement new regulations to restrict investments in Chinese AI enterprises. These regulations are currently undergoing final review by the Office of Management and Budget (OMB) and are expected to be released soon. This move is a significant action in the Sino-US technological competition.

These investment restrictions stem from an executive order signed by President Biden in August 2023, aimed at preventing the United States's high-end technology from contributing to China's military capabilities.

The new regulations primarily target overseas investments in sensitive areas such as AI, semiconductors, microelectronics, and quantum computing. According to these rules, American investors will be required to report their investment activities in these critical areas to the Treasury Department. Officials hope that the final version of the regulations will more clearly define which types of transactions will be restricted, especially in terms of AI applications and investor responsibilities.

Laura Black, a former Treasury Department official who is now an attorney at Akin Gump Strauss Hauer & Feld LLP in Washington, D.C., said these new regulations may be announced before the U.S. presidential election on November 5. She noted that such regulations typically provide at least a 30-day grace period for companies to adjust.

The Treasury Department first released a draft of the rule in June and solicited public comments. The draft not only requires U.S. companies and individuals to determine whether their transactions are affected but also details specific circumstances where investments are prohibited, such as projects involving high computing power or military applications.

Additionally, the draft includes some exceptions, such as investments through mutual funds, index funds, or certain types of syndicated debt financing. It is expected that these exceptions will be further clarified in the final version.

These measures reflect the United States' deep concern about China's progress in cutting-edge technologies and an attempt to prevent financial and technological flows that could strengthen China's military capabilities. Amid escalating tensions between the United States and China, this policy marks a broader strategy by the United States to protect its technological advantages and strengthen control over key industries.

The announcement of these new regulations is expected in the coming days, at which point attention will shift to how these new restrictions will be implemented and how they will affect investment flows between the United States and China. The introduction of this measure is a crucial step for the United States to safeguard its interests in the global technological competition.